Leeds United are preparing for life under a new set of Premier League spending rules.
Under the new Squad Cost Ratio (SCR) system, top-flight teams will be allowed to spend 85 per cent of their revenue plus a three-year average of player sale profits on first-team wages and transfer costs.
We don’t yet have Leeds’ accounts for 2025-26, so the club’s proximity to the threshold remains to be seen. But in 2024-25, Leeds’ turnover was £137m and their player sale profits were about £25m. Meanwhile, they spent £103m on wages and registered transfer amortisation of £46m.
Assuming that an industry-average 75 per cent of the wage bill was spent on the first team, that would give Leeds United a ratio of about 73 per cent. In other words, they would have had room for manoeuvre under the 85 per cent SCR limit.
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Clearly, costs will have increased after promotion to the top flight , as has revenue. Now, with Premier League survival ensured for another season, 49ers Enterprises should have some flexibility to spend this summer.
In the end-of-season statement released yesterday, Leeds chairman Paraag Marathe alluded to the transition away from Profit and Sustainability Rules towards SCR.
“This summer, instead of Profit and Sustainability Rules (PSR), the Squad Cost Ratio (SCR) will impact our transfer market approach. As our accounts reflect, we spent every penny possible, as promised, to earn promotion and keep the club in the Premier League. Our approach to the transfer market will once again be strategic and disciplined to comply with regulations while striving further to improve, and players will both arrive and depart as a result.”
And while Marathe appears to be managing expectations to a degree, the reality is that Leeds could soon have one of the highest SCR ceilings outside the so-called ‘Big Six’.
As a club with an engaged global fanbase and hyper-local loyal supporters, there is room for growth in the club’s already impressive commercial and matchday income. The expansion of Elland Road, clearly, is the biggest opportunity here, with the development set to allow 53,000 fans to watch matches in-house.
On top of the increased number of seats, 49ers are planning to regenerate the area surrounding the stadium and increase the number of revenue generating opportunities on non-matchdays.
In a recent interview, Leeds board member and real estate luminary Peter Lowy emphasised the club’s desire to regenerate the LS11 area, creating opportunities for investment in both commercial and residential property.
And with the right approach, says University of Liverpool football finance expert Kieran Maguire, Leeds can also reap an SCR benefit from the development of stadium’s footprint beyond the money they make through the turnstiles on matchdays.
“If you look at clubs like Bristol City where there has been a major redevelopment, you’re looking at £10m-plus in terms of revenue” he exclusively told Leeds United News.
“You can create a business hub, conference facilities, a hotel and so on, so I certainly think that is achievable at Leeds with the redevelopment of the wider area.
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“Whether there are profits there or not is a different discussion, but from an SCR perspective, having a hotel on-site increases your top line, which increases the amount you can spend on transfers and wages.
“But there has to be well-planned transport links and infrastructure in advance, otherwise there will be complications. You don’t want an isolated stadium, because that won’t make any money.”
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